Reached Daily Limit?

Explore a new way of legal research!

Click Here
Indian Case Summary

The Oriental Insurance Co. Ltd. vs Dicitex Furnishing Ltd. on 13 November, 2019 – Case Summary

Print Friendly, PDF & Email

In the case of The Oriental Insurance Co. Ltd. vs Dicitex Furnishing Ltd. on 13 November, 2019, the Supreme Court of India was called upon to adjudicate a dispute arising from an insurance claim. The case was presided over by Justice S. Ravindra Bhat and Justice Arun Mishra.

Facts of the Case

Dicitex Furnishing Ltd. (hereafter “Dicitex”) had obtained a Standard Fire and Special Peril Policy from The Oriental Insurance Co. Ltd. (hereafter “the insurer” or “the appellant”) to cover the stocks of goods lying in its three separate godowns located at Thane, Maharashtra. The total sum insured was ₹13 crores. On 25.05.2012, a fire broke out, completely destroying all the stocks in all the three godowns. Dicitex informed the insurer about the fire and the consequential loss, and lodged a total and final claim upon the insurer for a sum of ₹14,88,14,327.

The insurer appointed M/s. C.P. Mehta & Co. as Surveyors and Assessors to survey the loss suffered by Dicitex and to report on the claim to be lodged upon the insurer. After visiting Dicitex’s factory and the godowns, and after scrutinizing the materials submitted by Dicitex in support of its claim, the Surveyor appointed by the insurer filed a Final Survey Report recommending that the claim be settled for an amount of ₹12,93,26,704.98.


The insurer, however, did not accept the report submitted by their own surveyor and instead appointed M/s. Naveen Jhand and Associates to re-compute the costings. According to the report submitted by M/s. Naveen Jhand and Associates, the assessment worked to ₹7,16,30,148. The insurer insisted that Dicitex sign a discharge voucher for this amount in full and final settlement of their claim. Dicitex signed the discharge voucher under protest, stating that it was under economic duress and financial distress.

Court’s Observations

The court noted that Dicitex was facing financial constraint and economical and financial duress on the part of the insurer in not sanctioning and paying the final claim for 27 months from the date of fire. Dicitex had faced pressure from their bankers and suffered from other business liabilities including the demand of income tax department. The court held that the discharge voucher signed by Dicitex could not be considered as an unconditional discharge voucher thereby Dicitex giving up their claim in future arising out of the said discharge voucher.

The court also observed that the insurer could not have insisted for execution of a discharge voucher as a pre-condition before releasing any payment. The court held that this procedure was unfair, irregular, and illegal.


The court allowed the application of Dicitex for arbitration, stating that it would be appropriate if the issue raised by the insurer that Dicitex had signed such discharge voucher unconditionally and the issue raised by Dicitex that the same was under duress and coercion is conclusively decided by the arbitral tribunal. The court also held that the arbitration agreement exists between the parties.